Safeway World Trade v Union of India

Facts

• Safeway held legitimate CENVAT/VAT credit balances under the pre-GST regime
• The GST transition required filing Form TRAN-1 to carry forward credit into the GST system
• Technical glitches on the GST portal prevented timely filing
• The department denied credit on the ground of missed deadline
• Safeway filed a writ petition challenging the denial

Issues

1. Whether transitional credit can be denied solely due to technical portal failures
2. Whether S.140 CGST Act creates a substantive right to credit or merely a procedural one

Held

• Transitional credit under S.140 is a vested right, not a concession
• Technical glitches in government-run portals cannot be used to deny substantive rights
• The authorities must provide reasonable opportunity to file TRAN-1
• Credit allowed; authorities directed to open the portal or accept manual filing

Ratio Decidendi

A substantive right to credit accumulated under a prior tax regime survives the transition to GST. The transitional filing mechanism (TRAN-1) is procedural; its failure cannot extinguish the underlying right. The government bears the burden of ensuring its systems work; taxpayers cannot be penalized for system failures.